Did the Framers Favor Hard Money?. The Old Republican leader John Randolph, the aristocratic liberal from Virginia, once famously remarked that the framers intended ours to be “a hard-money government.” Is it true? Contrary to the efforts of academics and judges to obscure this issue, the framers’ intentions in regard to money and banking were quite plain and are easily reconstructed.
On balance, the framers’ views can be summarized as follows. On the one hand, they believed in fractional-reserve banking, generally following Adam Smith’s currency and banking theories. On the other hand, they were resolutely opposed to government-issued paper money, fiat money, legal tender laws, inconvertible paper currency, and land banks. On the question of a national bank, they were divided, but they all believed in a hard dollar (defining the dollar as a certain weight of silver and/or gold). On a spectrum, their views would be closer to those of Murray Rothbard and Ron Paul than John Maynard Keynes and Alan Greenspan. [Ludwig von Mises Institute]
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